Second-Best Justice: The Virtues of Japanese Private Law

J. Mark Ramseyer

Abstract

Japanese people file few lawsuits. They do not file few suits because the Japanese culture discourages them from asserting their claims(After all, they do assert their claims.). Neither do Japanese file few suits because they face institutional barriers to litigation. They face fewer barriers than American claimants face. Instead, Japanese file fewer suits because they face a legal system that signals to them—in advance—the amounts they would collect or owe if they did take their dispute to court. If they know what the judge would say if they asked, they have little reason to actuallyask him. ... More

Japanese people file few lawsuits. They do not file few suits because the Japanese culture discourages them from asserting their claims(After all, they do assert their claims.). Neither do Japanese file few suits because they face institutional barriers to litigation. They face fewer barriers than American claimants face. Instead, Japanese file fewer suits because they face a legal system that signals to them—in advance—the amounts they would collect or owe if they did take their dispute to court. If they know what the judge would say if they asked, they have little reason to actuallyask him. Economists call it the “theory of the second best.” Sometimes when a given factor (the cost of legal services, for example, or the human inability to reconstruct the past) prevents one from attaining a given goal (individualized damage computations, for example), one does best not even to try. Instead, one does better to make do with more modest goals. The Japanese courts provide this predictability because Japanese expect less of their courts than Americans do. Americans sue because the legal system works so badly—and in part it works badly they try too hard to offer a perfect legal system. Japanese expect less of their courts, but what it supplies it delivers very effectively.

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